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Air India's bank A/c sealed for service tax default
January, 13th 2012

The service tax department has frozen the bank accounts of national flag carrier Air India for failing to pay sevice tax dues of about Rs 170 crore.

A service tax official said the department froze AI's bank accounts two days ago. He said officials of Air India and Central Board of Excise & Customs are in talks now to salvage the situation for AI.

The service tax department had frozen Air India's accounts last month, but the same was lifted after a series of meetings with the officials of Air India and the Central Excise Commissionerate, and on the guarantee that the airline will pay the dues before the end of the year 2011.

"Not paying service tax dues is a serious offence. The tax was recovered by the airline from the passengers or the parties concerned, for depositing with the government. It is the government's money which was being diverted," a Central Excise official said.

Earlier, Kingfisher Airlines' account too was frozen but the the same was lifted after the Vijay Mallya-led airline paid the first installment of the dues amonuting to over Rs 100 crore.

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